Im j. J. Ramberg and welcome to your business, the show dedicated to giving you tips and advice to help your business grow. Im often asked which Small Business owner ive met over the past seven years has inspired me the most and my answer is always the same. Kim benson. She to me embodies what it means to be an entrepreneur. Shes risk taking but calculate and is willing to change paths when she sees a better one. Thats exactly what she did when she turned her company into a business that helps people lose weight. Cha, cha when first met her in 120u she was working out of her home. Shes come a long way since then. Its incredible. I mean i look at this space and i have to pinch myself its really here. In 2008 kims husband mark was laid off from his job and because of an illness couldnt get a new one. They had some saving, 18,000, but with all of their expenses it wasnt going to last long. It was, as she describes it, a petrifying time. Very scary. It was very scary. We had four children, a mortgage, you know, middle income america. So what did kim do . Get a job . Nope. She took that money and invested most of it in an idea she had to make lowfat bagels, a gamble to take the least. It was our one opportunity. Of the two outcomes you certainly would have been safer betting on failure. Kim had no business experience and did not have access to deep pockets but what she did have was a keen sense of the market. A few years earlier she had lost more than 150 pounds and had become a bit of a celebrity to others wanting to do the same. What matters is the only way youre never going to lose weight if you stop trying. He had an amazing no for an answer kind of attitude. She knocked on a door after door after door until they said they would buy her baygos. By the time i met her, her company was doing well. It was early days. Her sons room was the stock room. Well, that was then. This is now. Time to enlist this incredible change in our lives that we all really want, go from somebody whos not healthy to somebody who is healthy. This is kims Weight Loss Center in shelton, connecticut, complete with meeting room, private dietician, a commercial kitchen, and a cafe. When i walked in, the first question i had was where are the bagels . Its really hard to be the little guy in a big sea of bagels or other products. I wasnt getting personally from it what i get now and thats really important in keeping yourself going. Kim had made a drastic change in the direction of her company and the same kind of self confidence combined with the knowledge of the market that propelled her to start the Bagel Company inspired her to put the bagels on the back business. I dont know the business. Weight loss . I have a rapport with my bot literally. Youre doing Something Wonderful for you. While she still makes the bagels, kim now concentrates on helping others go through the same journey she went through. Thats donna. Donna, wave. Whats your total weight loss . 112. 4 pounds. And, sue, you lost . 25. It was a nerveracking transition from building up her bagels to building up her weight loss big sniet was a big lag. It was a very scary time, but i guess ive always done things by what i feel in my gut, and i couldnt not do the other. As you watch her in action, you can see why she believed she could do it. We want to eat this way and we want to look this way and its impossible and were torn in two. Kim is just a terrific motivational personality. Shes just great. She cares so deeply about people in their lives and what they want and helping them achieve their goals. It feels to me you believe so wholeheartedly in your company and in your mission that people almost cant help but believing in it too. I know. I agree. I do believe it with all my heart and its infectious. Do you ever doubt yourself . Not really. I question and i ask. I have a great supporters. Her enthusiasm spawns other people. We advertise together, eat together, we have an online community. And spread the word about the company. In ohio when he goes to the doctor and he look says youre healthy weight range. He emails me. Asks for information and starts referring clients. Her struggle is how to keep up with the growth and deciding where to invest her profits. In the meeting, online, the packaged good, or building out her premade meals business. It takes more time and it takes planning ahead, but if youre willing to sacrifice that, then you get to save money. And during the day she spends a lot of time thinking about those decisions except when shes up in front of her meetings. Then all bitz issues move aside. When im standing up in front of everybody, its really all about them. I want you to know what its like. I want you to feel how good it feels. I want you to know its not easy but its really simple and you can do it. She makes running a business that simple too. In buzz word terms what kim did is called a pivot. She changed the direction of her company when she saw an opportunity. Lets turn to this weeks board of directors. Eric and julie. Great to see both of you guys. Nice to be here. Great to be here. I said it before. This woman is my favorite entrepreneur. Shes so inspirational. Its summed up in that question of do you ever doubt yourself and she said no and she really believe thad. It reminded me of something Richard Branson said. No matter how good you are starting up, 99 are going to tell you you fail. Every entrepreneur has to have that hutzpah, that belief, because its not easy. But youve got to get through it by yourself. In her case she said it was pretty successful. She said i cant compete with those guys. My company will only go to here. What does it take to have the guts to say i know revenue is coming in but im leaving this alone. I love it. The pivot is about having i think one of the hardest things to possess is the combination of passion and dispassion. So enough passion and belief that when people say your ideas not going to work, you charge ahead and you have that risk tolerance do it and another dispassion to step back, look at the market, and say, is it going to work . Is it going to be a mediocre business, is it sideways, and is there a bigger opportunity. The other thing i loved that she honored that was deeply perj is to me the mark of a great on tre near when theyre doing something deeply personal to them. That becomes your unique insight. Shes the embodiment of her business. When she said i couldnt not do this, it also speaks to something great entrepreneurs have. When they have a calling, they feel its not a choice for them. She really struck on all those marks. For her selling it, shes not selling it. Shes speaking from her heart. Thats what makes it so infectious as we say. And these people want to follow her because she believes in it so much. If you have a company that youve start and you want that, you want what kim has but its not in your heart the same way that is because not all entrepreneurs get to have that, how can you make it till you make it. How do you get that if its not as internal . You have to find the part of it that you can focus on, whether its who you serve, the fact that you identify with your customers in some way or that youre doing it for your kids or your families or like some people because someone told you you couldnt and you need to prove them wrong but you have to find that spark because this is too hard to do otherwise. All right. You guys stick around, because we need you a lot more in this show. We use our smartphones for a lot of our Small Business needs but is your information safe. Here now are five ways to protect yourself from cyber attacks. K one, set a password. This will make your phone more difficult to access if your phone is ever lost or stolen. Two, look at your phone bill. Be on the lookout for strarj behavior. Number three, download from trusted sources. Make sure the app is coming from a legitimate provider and compare the apps sponsors official website with the app store link. Four, understand permissions before accepting them. Be careful about granting access to personal information on your phone. Make sure to check the privacy settings for each app before installing it. And number five, wipe data on your old phone before you donate, resell, or recycle it. Completely erase everything and reset it to its initial factory settings. On april 5th, 2012, president obama opened up a whole new source of funding for Small Businesses when he signed the jobs act. In it was a provision to let Small Business owners crowd fund. Now let me back up for a skochbltd crowd funding, as you know, has been around for a while, but theres a difference between the current form of crowd funding and the kind that was made legal through the jobs act. Right now you list your company on a crowd funding site. For example if youre hoping to raise 50,000, you may give people the ability to give you anywhere from 10 to 20,000. In return you give them a prize. Not equity, a prize. A guy put his jellyfish tank company up on the sidekicks starter and in return, he gave them one of the tanks or other prizes based on how much money they gave. Well, the jobs act opened Small Business up for a new kind of crowd funding where instead of giving a prize you give equity in your company. For anyone interesting, april 5th was an exciting day but its gotten less exciting because you still cant do it. The s. E. C. Was supposed to come up with a regulation to put it in place by the end of last year. They missed their deadline and we still dont know when it would be done. More about the ins and outs of crowd funding and eric and julie are back now with us. Great to see you, sherwood. Great to see you, j. J. Thanks for having me. Given us a lay of the land. The deadline has been missed. Other deadlines have been missed. Does it seem like this this will will done by the ended of 2013 . Well, were hopeful. Now that we have a new commissioner coming in, we think its going to cause a bit of a delay. Our goal as an center is to show up and help get these rules out for public comment. Do you have any sense of timing on this . Well, it really depends on when shes confirmed by the senate. So we need to wait to see when the senate takes that up and we need to get in washington and make sure. Is there a deadline . Could this go on for five years . Thats a good point. The s. E. C. Has a reputation for missing deadlines. Theyve worked really hard, the staff, to get this, the proposed rules done, but its really a political game and it comes down to what the commissioners want to put on their plate and when they want to do that. Julie, i wanted to ask you because you start companies, you advise companies. When it starts, do you think its a group way to get money . It can be a very effective way of getting money. Its a way of demock rah advertising access to capital and amplifying something thats happening in Silicon Valley which is kind of angel investing process or what we often call friends and family where you kind of recruit people in your network who believe in you because when youre starting a company, its really about you and your idea, so its about people investing in you. So this allows access to this Broader Market of people. So where you cannot only amplify through family is there any downside . We know there are worries that a lot of own vesters might be fooled into giving money for an entrepreneur, is r there any downsides . I would make it a low priority in my funds search. If you go to a seasoned angel, along with giving out equity, you get a lot of expertise, a network of really seasoned people who have deep ties in your industry to be rooting for you and on your side. With crowd funding. You get mom and pop investors who dont know much or arent able to help you in the board of directors way that an angel can. Pluft you have a lot of owner. If you have another option. Id take that first. Two things. Theres debt based crowd funding and crowdbased funding. A lot of these businesses dont qualify, so its going to be a real opportunity for them to go to their customers and look at them for loans to fund their businesses. Thats really where i sherwood, debtbased crowdfunding already skpifexis right. But in a limited capacity. What the jobs act does is open it up for more people to participate. What is it again . A Million Dollars . A Million Dollars per year. So for anyone who has a kernel of an idea, theyre hopeling it gets through the s. E. C. , what should they do to prepare themselves assuming that dont have access, think they want to use this, what should they be doing now to prepare themselves, sherwood . You cant crowdfund without a crowd. Start building your social network. The way in which youre going to get people to these platforms is linking your accounts to them and thats how youre gong to solicit them. So you really need to build a robust crowd in order to raise capital from them. Sherwood, thank you so much for joining us. Im quite sure we ooher gong to be speaking to you a come more times before this gets to the s. E. C. I hope so. I hope it goes live. When we return we answer your business questions on the topic of funding including getting second and third round financing and finding investors whing going from whole sale to retail. And on fat tuesday they say let the good times roll with their goodtime fatty pretzels. Weve all had those moments. When you lost the thing you cant believe you lost. When what you just bought, just broke. Or when you have a little trouble a long way from home. As an American Express cardmember you can expect some help. But what you might not expect, is you can get all this with a prepaid card. Spends like cash. Feels like membership. Earlier this the program we profile add woman who launched kims light bagels. These woman took their product when naming fatty sunday. Hi. Im ali. I ceo. Im laurie and cfo. Can we eat these . Absolutely. These are for you guys. Thank you. My sister laura and i sell hand dipped naturally flavored chocolate covered pretty zill e. We have peanut butter, orange, toffee, cookie, something for everyone. Our pack of five pretzels retails for 6. 25 and can be purchased at our online story. Just closed up our First Successful popup shop. Our pretzels can apt bls b found at the trump hotel in chicago and the grill. Were seeking an investment of 300,000. It will be used to hire a copacker, increase production, employees to expand our operations and a food broker. You can read more on our website at www. Fattysundaes. Com. And we have a sale going on. Check it out. You guys have done a good job of promoting these pretzels. You guys are featured right here in brooklyn. Lets start with you, eric. Did they get everything in the pitch . They got everything in the pitch and in the pretzel. Its really good. But i have to say i think krispy kreme, im going to lose all my money. Were basically talking about dough dipped in something. Theres not a big barrier entry. A lot of people can do it including companies that are bigger and have a greater distribution. So what i would want to see in a pitch is some kind of asset that you have that is unique that would keep anyone else out like a distribution chain that you have locked up, like this hotels thing. And another thing is how am i going to make money as an investor. Presumably youd sell the company in the future but to whom snoochl okay. So, julie, knowing that an elevator pitch is awfully really quick is there anything else they should have include thad they could have done in a sentence or two . You struck on all the markers i look for. People, your energy is good, you clearly love your product, the products great. A lot of companies forget to actually demo their product and you did that right away. Customers, youve got nice customers in distribution. What i would have loved to have heard is how well youre doing, how far youve gotten on how little, and then what are you going to go how far is it going take you. And the biggest thing is how big can this get . Just to underscore erics product you need to talk about whats unique, whats the differentiation, why if someone does a knockoff if theyre successful are we going to be able to ino e vat beyond that or invest in brand . Okay. The moment of truth. Based on what they heard, what you heard today, would you take another meeting . I would take another meeting as long as they brought the pretzels. What about you, julie . You were about to say the same thing . Yes. Thank you, guy, for all of your advice and if any of you have a product or service and you want feedback from our elevator pitch panel on your chances of getting interested investors. You know what to do. Send us an email at yourbusiness msnbc. Com. Indicate what your company does, how much money youre looking for and what you intend to do with the money. You never know. Somebody watching this show may be interesting in even hing you. Its time now to answer some of your business questions. Eric and julie are with us once again. The first one is about switching gears and heading in a different direction. Weve been 25 years in whole sale liquidation business and were spearheading into retail and i need Capital Investment and being that its a different industry. I dont know where to start. Amtd and it is . Rather than try to convince a lender based on what you think is going to happen, try to work with what you have. Borrow against that. Assetbased lending, the secondary market for it has come back to the way it was in 2007, so theres going to be a demand for that. On the equity side, maybe they can partner with them. Are there any other suggestions . Well, thing in the earliest stages, finding a way to fund the early stages through that until youve taken the early risk. And prove yourself. People will be happy to invest in something that seems to be working. Lets move on to the next one. This is a question from carl. He writes where do i get a second and third round financing at reasonable rates . Why are you both laughing . Its kind of know mans land out there. They know you. Everybodys presumably stronger. If it isnt, make sure it is and you pretty it up. Yeah, you know, we just did a story a couple of months ago about an Ice Cream Store in maine who just assumed that their bank would give them another loan. They had gotten the first loan. They had been paying on time and the bank said no. You shouldnt go in there expecting to get money when you might not. Youre both still laughing so basically its hard. Its hard. I mean back to the reasonable rates. I mean i think whether youre raising venture money or raising from a bank, the only way to get the best deal is let the Market Pricing which means creating a competitive environment and beating the streets. And its tough. A lot of things got funded in the market and the second and third stage investing, they can step back and say where are the breakout winners, we can invest in those. If you get a lot of money, a lot of others are left hanging in the no mans land. This is about maximizing your marketing. When youre spending marketings dollars on two different channels, when should you start the shift investment to one channel versus the other. What type of data points should you be looking for. Well, this is all about measuring, right . If youre measuring, well, it will be very clear. So at what point how much better does one have to be before you say, okay, im moving all of my money over . We live in a world of multichannel marketing. I dont think it one versus the other. With very a highway of measuring level efficacy. A diversified approach to channel marketing is really important and the more measurable, the more attractive because you know how youre spending your money. I think its less about that and more about performing. Sometimes youll find your business lends itself to one particular channel. But often its more of a mix. Really its not that this is better than this. Its sending the wrong message there. It could be. You should make it your business to know which half. If you dont have a website, you should be asking customers every time they come in your door, what brought them. Then youre finding out where youre getting best return and lowest acquisition costs. Thank you for all your advice. This is really helpful. If any of you have a question for our experts, all you have to do is go to our website its openforum. Com yourbusiness. Once you get there, hit the link. Again its openforum. Com yourbusiness. If youd rather you can im your questions and comments to yo yourbusiness msnbc. Com. The resumator. Com. You can track, rate, organize from start to finish all from one clean interface. To learn more about todays show, just click on our website. Its openforum. Com\yourbusiness. Youre find all of todays business and more information to help your business grow. And you can follow us on twitter. Its msnbcyourbiz. And next week, it all started with two mothers who helped their daughters decorate their lockers. On the first day of school the phones started ringing with other parents saying where did you get that stuff . Great, now youve done it. Now my daughter wants it. Today theyve got national distribution, factories in china, and millions in sales. Next week find out how they did it step by step. Until them, im j. J. Ramberg. And, remember, we make your business our business. Weve all had those moments. When you lost the thing you cant believe you lost. When what you just bought, just broke. Or when you have a little trouble a long way from home. As an American Express cardmember you can expect some help